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W.W. Grainger (GWW) 4Q Earnings Rise 5 Pct, Yet Miss Estimates

 January 24, 2013 09:38 AM
 


(By Balaseshan) W.W. Grainger Inc. (NYSE: GWW), a supplier of maintenance, repair and operating products, reported a 5 percent rise in quarterly earnings on higher sales, improved margins and positive operating leverage. Results missed Street's expectations.

Net earnings rose 5 percent to $156 million for the fourth quarter. Earnings per share (EPS) were $2.17, up from $2.04 last year. Adjusted EPS rose to $2.42 from $2.13.

Sales increased 7 percent to $2.23 billion.

Analysts, on average, polled by Thomson Reuters had expected EPS of $2.61 on revenue of $2.24 billion for the fourth quarter.

The latest quarter sales growth consists of 3 percentage points from price, 2 percentage points from volume, 1 percentage point from Hurricane Sandy-related sales, 1 percentage point from acquisitions.

[Related -Optimism Moving Back Into The Equation]

Sales for the United States segment increased 5 percent, driven by 3 percentage points from price, 1 percentage point from volume, 1 percentage point from Hurricane Sandy-related sales. The sales increase in U.S. was led by strong growth in manufacturing, commercial and government customer end markets.

Second quarter sales for Acklands-Grainger increased 14 percent, 13 percent in local currency, which consisted of 8 percentage points from volume, 4 percentage points from foreign exchange, 1 percentage point from price, 1 percentage point from sales of seasonal products.

The company said the sales increase in Canada was led by strong growth to customers in the commercial, construction, oil and gas, and utilities end markets.

[Related -W.W. Grainger, Inc. (GWW) Dividend Stock Analysis]

Looking ahead into the fiscal 2013, the company reiterated its EPS guidance of $10.85 to $12.00, while Street analysts predict $11.74. The company raised its 2013 sales growth outlook to range of 3 percent to 9 percent from previous estimate of 2 percent to 8 percent, while Street predicts 6.30 percent growth.

GWW is trading down 1.95 percent at $205.70 on Thursday. The stock has been trading between $172.50 and $221.84 for the past 52 weeks.

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